GM Suppliers Hurting From Autoworkers Strike, Too

Many of the workers for businesses that supply GM are out of work, too, because of the UAW strike.

Paul Sancya
/ AP

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Originally published on October 9, 2019 1:49 pm

With the UAW strike against General Motors in its fourth week, the automaker is losing millions of dollars. So are the businesses that supply GM. Many of their workers have also been out of work for four weeks, but unlike the striking UAW workers, their plight is much less visible.

Lansing, Mich., has nine regional GM suppliers. These are companies that do everything from producing ads to making parts for GM's cars and trucks. Altogether, that's more than 6,000 jobs. Supplier jobs in Lansing outnumber GM jobs.

Anderson Economic Group in East Lansing has been putting out weekly estimates not only about how much money GM is losing, but also the strike's effect on UAW workers and nonunion employees working for GM suppliers.

Through last week, Anderson estimates that their combined losses will exceed $412 million. For suppliers across the country, that's more than $30 million per day in lost wages.

"I mean if you got that many GM workers and suppliers, you're going to feel it. And nowhere is the concentration like Michigan," said Patrick Anderson, the company's CEO. "And it means white collar, blue collar, new collar — every kind of collar is affected by this and I am very concerned about Michigan going into a one-state recession."

Feast or famine

In the fourth week of the strike, nearly 11,000 people in Lansing are feeling the economic pinch and being forced to drastically cut back.

Picketers cluster around the corner of Tony M's, a blue-collar banquet hall and bar outside the plant that makes Chevy Traverses and Buick Enclaves. Inside the building, it's deserted. The afternoon rush is just three guys and the bartender. Many of the regulars work for suppliers and haven't worked since mid-September.

Tamara Farrell has been on the receiving end of cutbacks. She's the co-owner of Tony M's. Farrell says she's had to stop serving third shift breakfast because all her regulars are out of work.

Farrell is also allowing UAW workers to picket outside on the corner. She said that has helped business a little. But there's a hole where business from people who work for suppliers used to be. "That business is gone," she said. "My morning breakfast — that was my morning breakfast."

He's a skilled trade worker at Magna Dexsys, a supplier that makes bumpers and fascia for the Camaros, Cadillacs and Buicks made in Lansing. His income was slashed in the first couple of weeks of the strike.

The $362 he collected for unemployment was barely 20% of his wage at Magna. And, he said, the number on the unemployment check hasn't gone up much since he was off work at Lear Corp., another supplier in Flint, Mich., during another long strike over a decade ago.

"Being in the auto industry you kind of learn that it's feast or famine," Grimaldi said. "And just because things are going really well doesn't mean that they always go well. So you try to prepare. But you can never prepare for an unknown end to something."

Grimaldi just went back to work because he does electrical work and maintenance that can be performed at any time. But he guessed 95% of his 500 or more co-workers at the plant are still out of work.

In a statement, a spokesman for the company said, "a few of our GM-dedicated plants remain idle."

Grimaldi said he's worried about people working for suppliers who are in strike mode even though they didn't vote to strike.

"And it's like all the focus is on GM. That's the spotlight. But just outside the spotlight I'm watching in the dark, in the shadows, but nobody can see me because the spotlight is only so big. So it's tough, and I've been literally talking about it with my wife and with my friends. And we have not been mentioned at all. And, I mean, there's people that are not going to be able to recover for a long time."

Can they recover?

Kristin Dziczek is vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor.

It's not just workers who won't be able to recover, she said. It's also the businesses employing them. One of Dziczek's biggest worries is "Can they make this production up when the strike eventually does end? Is there an opportunity for the workers and for suppliers to make up this hole? And it's getting to the point where they can't, at least not in this year."

Since the strike began, officials at Michigan's Unemployment Insurance Agency estimate that a third of the 15,000 claims made through late September relate to the strike.

That doesn't include the nearly 20,000 UAW workers who are not eligible for unemployment. They began receiving $250 in strike pay last week.

For now, in places like Lansing, thousands of people who didn't go on strike and aren't represented in the talks remain out of work.

The strike at General Motors is affecting people who do not work at General Motors. GM makes use of many suppliers. And when the United Auto Workers stops the assembly line, it affects everyone on the supply chain.

Here's Abigail Censky of our member station WKAR.

ABIGAIL CENSKY, BYLINE: Lansing, Mich., has nine regional GM suppliers - companies that do everything from producing ads to making parts for its cars and trucks. Taken together, we're talking about more than 6,000 jobs. And that means there are actually more supplier jobs here than direct GM jobs.

Patrick Anderson is the CEO of the Anderson Economic Group in East Lansing. His firm has been putting out weekly estimates not only about how much money GM is losing but also the strike's effect on UAW workers and nonunion employees working for GM suppliers.

Through last week, he estimates that combined, they've lost more than $400 million. That's tens of millions of dollars each and every day the strike continues.

PATRICK ANDERSON: If you've got that many GM workers and suppliers, you're going to feel it, and nowhere is the concentration like Michigan. And it means white-collar, blue-collar, new-collar, every kind of collar is affected by this. And I am very concerned about Michigan going into a one-state recession.

CENSKY: In the fourth week of the strike, nearly 11,000 people here in Lansing are feeling the economic pinch and having to drastically cut back on their spending.

Tamara Farrell knows that all too well. She's co-owner of Tony M's - a blue-collar banquet hall and bar outside of the plant that makes Chevy Traverses and Buick Enclaves.

The building's exterior mirrors the drab industrial park surrounding it. But inside, it's warm and kitschy with Italian decor and the sound of gambling machines and daytime TV. Only three guys are sitting at the end of the long mahogany bar where Farrell says she's had to stop serving third-shift breakfast because all of her regulars are out of work.

TAMARA FARRELL: This long table behind you - there was probably 15 people sitting there. That's the day we came in and we were told, GM is on strike. You go home. They have nothing to do with GM.

CENSKY: Michael Grimaldi isn't surprised that Tony M's is hurting for business. He's a skilled trade worker at Magna Dexsys - a supplier that makes bumpers and fascia for the Cameros, Cadillacs and Buicks made in Lansing. His income was slashed in the first couple weeks of the strike.

MICHAEL GRIMALDI: Being in the auto industry, you kind of learn that it's feast or famine. And just because things are going really well doesn't mean that they always go well. So you try to prepare, but you can never prepare for an unknown end to something.

CENSKY: Grimaldi just went back to work because he does electrical maintenance that can be performed at any time. But he guesses 95% of his over 500 co-workers at the plant are still out of work. Grimaldi says he's worried about people working for suppliers who are in strike mode even though they didn't vote to strike.

GRIMALDI: And it's like all the focus is on GM. That's the spotlight. But just outside the spotlight, I'm watching in the dark, in the shadows, but nobody can see me because the spotlight is only so big. So it's tough. And I've been literally talking about it with my wife and my friends, and we have not been mentioned at all. And, I mean, there's people that are going to be - not going to be able to recover for a long time.

CENSKY: Since the strike began, Michigan's unemployment officials estimate that a third of the 15,000 claims made relate to the strike. And that doesn't include the nearly 20,000 UAW workers who are not eligible for unemployment because they get $250 per week in strike pay.

For now, in places like Lansing, thousands of people who didn't go on strike and aren't represented in the talks remain out of work.